Business Resources Report
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AI Summary
This report provides an in-depth analysis of business resources utilized by Blue Inc., focusing on recruitment documentation, required skills for job roles, internal and external finance sources, and financial performance metrics. It includes detailed sections on operational resources, cash flow forecasts, and the importance of effective budgeting for business success.

Business Resources
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Describe recruitment documentation.....................................................................................4
P2 Describe different skills which is required for applying for a specific job role....................5
P3 & M1 Describe main resources in operation.........................................................................5
P4 & M2 Describe range of internal and external sources of finance........................................6
D1................................................................................................................................................7
TASK 2............................................................................................................................................7
P5 & M3 Interpretation...............................................................................................................7
P6 Calculate contribution and break even point.........................................................................9
P7 Cash flow forecast................................................................................................................10
M4.............................................................................................................................................10
D2..............................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Describe recruitment documentation.....................................................................................4
P2 Describe different skills which is required for applying for a specific job role....................5
P3 & M1 Describe main resources in operation.........................................................................5
P4 & M2 Describe range of internal and external sources of finance........................................6
D1................................................................................................................................................7
TASK 2............................................................................................................................................7
P5 & M3 Interpretation...............................................................................................................7
P6 Calculate contribution and break even point.........................................................................9
P7 Cash flow forecast................................................................................................................10
M4.............................................................................................................................................10
D2..............................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
In each and every company, employees as well as managers have to use appropriate
resources which helps in running the business in a efficient manner. Resources are the assets of
the firm and by that they can do all the operational activities of the business entity. There are
different type of resources which the company can use that is physical, financial, intellectual or
human (Business resources, 2017). The present report is based on Blue INC which is a UK based
retailers in the young fashion market. In the below mentioned report discussion based on
recruitment documentation which is used in the recruitment process of new staff.
TASK 1
P1 Describe recruitment documentation
Recruitment refers to the process of selecting, appointing right and suitable candidate for
the job. It can be permanent or temporary based on the roles designed by the company.
Recruitment is considered a core management function as all the employees need to undergo
training and recruitment before starting any job or before providing higher authority to the
individuals (Baxter, 2012). The recruitment contains all the necessary steps which can help in
attracting talented pool of candidates.
Identification of Vacancies refers to all the vacancies that need to be considered while
providing application for the particular job to the applications.
Position Description means that before any recruitment process starts all the candidates
should know about the position for which they are filling the application form. The
position not only includes only job description but also about all the aspects for which an
individual requires while filling the recruitment form.
Recruiting Plan means a plan of action that helps a company in analysing and choosing
the desired level of students for the selected post (Chaffey and White, 2010).
Implementation Process refers to the process by which each and every candidate is
evaluated for the purpose of checking his /her level of intelligence and all the skills
required for the job.
Blue Inc. being the fastest growing young fashion market retailers in UK provides all
the employees the type of working environment they require along with the introduction of
vacancies which help them to recruit new persons for the purpose of generating employment
In each and every company, employees as well as managers have to use appropriate
resources which helps in running the business in a efficient manner. Resources are the assets of
the firm and by that they can do all the operational activities of the business entity. There are
different type of resources which the company can use that is physical, financial, intellectual or
human (Business resources, 2017). The present report is based on Blue INC which is a UK based
retailers in the young fashion market. In the below mentioned report discussion based on
recruitment documentation which is used in the recruitment process of new staff.
TASK 1
P1 Describe recruitment documentation
Recruitment refers to the process of selecting, appointing right and suitable candidate for
the job. It can be permanent or temporary based on the roles designed by the company.
Recruitment is considered a core management function as all the employees need to undergo
training and recruitment before starting any job or before providing higher authority to the
individuals (Baxter, 2012). The recruitment contains all the necessary steps which can help in
attracting talented pool of candidates.
Identification of Vacancies refers to all the vacancies that need to be considered while
providing application for the particular job to the applications.
Position Description means that before any recruitment process starts all the candidates
should know about the position for which they are filling the application form. The
position not only includes only job description but also about all the aspects for which an
individual requires while filling the recruitment form.
Recruiting Plan means a plan of action that helps a company in analysing and choosing
the desired level of students for the selected post (Chaffey and White, 2010).
Implementation Process refers to the process by which each and every candidate is
evaluated for the purpose of checking his /her level of intelligence and all the skills
required for the job.
Blue Inc. being the fastest growing young fashion market retailers in UK provides all
the employees the type of working environment they require along with the introduction of
vacancies which help them to recruit new persons for the purpose of generating employment
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opportunities and creating and developing the working of the business in terms of better
customer services . For this interview is done by the company and selected candidates are chosen
as the employees of the company who can help in development of organization (Ciabuschi,
Perna and Snehota, 2012). Job description and person specification of sales assistant:
Job Analysis
Looking for a Sales Assistance to find out the desire of customers needs and demands. The goal is
top provide high class services to customers to gain growth in long term productivity.
The specification for the Sales Assistant:
Location: UK
Salary given to them: 10000- 25000
Vacancy: For 1 person only
Type of an employment: Permanent
Responsibility for the post:
High level of customer satisfaction through excellent service.
Maintain outstanding store condition and merchandising standards.
Capable in maintain proper inventory to meet the demand completely.
Ascertain consumer needs and demands.
Behave ethically to customers.
Manage point of sales through which appropriate production can made.
Keep up all the necessary information about market to get proper details.
Able to describe about the product quality and features.
Follow all companies policies and procedure.
Skills, knowledge and experience for this post:
Have to maintain positive attitude towards working.
Should have to be self motivated and innovative.
Friendly, helpful and confident
Aware about all new emerging opportunities.
Customer service focus.
customer services . For this interview is done by the company and selected candidates are chosen
as the employees of the company who can help in development of organization (Ciabuschi,
Perna and Snehota, 2012). Job description and person specification of sales assistant:
Job Analysis
Looking for a Sales Assistance to find out the desire of customers needs and demands. The goal is
top provide high class services to customers to gain growth in long term productivity.
The specification for the Sales Assistant:
Location: UK
Salary given to them: 10000- 25000
Vacancy: For 1 person only
Type of an employment: Permanent
Responsibility for the post:
High level of customer satisfaction through excellent service.
Maintain outstanding store condition and merchandising standards.
Capable in maintain proper inventory to meet the demand completely.
Ascertain consumer needs and demands.
Behave ethically to customers.
Manage point of sales through which appropriate production can made.
Keep up all the necessary information about market to get proper details.
Able to describe about the product quality and features.
Follow all companies policies and procedure.
Skills, knowledge and experience for this post:
Have to maintain positive attitude towards working.
Should have to be self motivated and innovative.
Friendly, helpful and confident
Aware about all new emerging opportunities.
Customer service focus.
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P2 Describe different skills which is required for applying for a specific job role
For the specified job role which is stated above that is sales assistant having the
appropriate skills so that they can provide best and qualitative services to their consumers. The
staff members having the ability to use the computer system so that all the work should be
managed in a appropriate as well as effective manner. Along with this they are having the skills
which assist in resolving the problems which occurred in Blue Inc.
Employability skills are the skills which are required to get a job or to be effective for the
job. Through the help of these skills an individual can work effectively and efficiently.
Along with this, these skills will help the individuals to have mutual and friendly
relationship with the employees of the company . These include experience,
qualifications required for the job.
Personal Skills refers to the skills which an individual needs to generate and develop in
order to get the desired job. These skills are the communication skills , management
skills, technical skills. If the individual knows and develops these skills then he can get
the job which he wants (Hahn and Gold, 2014).
Communication Skills refers to the skills which an individual needs to polish in order to
communicate with the employees, top management, customers, etc. For example, written
communication. Along with this employees having the ability to do proper conversation
with the consumers and also be in the effective manner. Communication is a 2 way
process that starts with sender who sends the message powered by the message received
by the receiver.
In order to develop its business Blue Inc. first needs to analyse the skills of the employees
working and then accordingly chose the market for the product or service. To make the company
profitable each and every skill which is being posed by the individual's is important for success
of organization (Hart and Dowell, 2011).
Examples for which the person having in the specified role:
Employability skills:
Problem solving skills
Always remain self motivated and take the initiatives to complete the work
Work under pressure and meet deadlines
Organisational skills
For the specified job role which is stated above that is sales assistant having the
appropriate skills so that they can provide best and qualitative services to their consumers. The
staff members having the ability to use the computer system so that all the work should be
managed in a appropriate as well as effective manner. Along with this they are having the skills
which assist in resolving the problems which occurred in Blue Inc.
Employability skills are the skills which are required to get a job or to be effective for the
job. Through the help of these skills an individual can work effectively and efficiently.
Along with this, these skills will help the individuals to have mutual and friendly
relationship with the employees of the company . These include experience,
qualifications required for the job.
Personal Skills refers to the skills which an individual needs to generate and develop in
order to get the desired job. These skills are the communication skills , management
skills, technical skills. If the individual knows and develops these skills then he can get
the job which he wants (Hahn and Gold, 2014).
Communication Skills refers to the skills which an individual needs to polish in order to
communicate with the employees, top management, customers, etc. For example, written
communication. Along with this employees having the ability to do proper conversation
with the consumers and also be in the effective manner. Communication is a 2 way
process that starts with sender who sends the message powered by the message received
by the receiver.
In order to develop its business Blue Inc. first needs to analyse the skills of the employees
working and then accordingly chose the market for the product or service. To make the company
profitable each and every skill which is being posed by the individual's is important for success
of organization (Hart and Dowell, 2011).
Examples for which the person having in the specified role:
Employability skills:
Problem solving skills
Always remain self motivated and take the initiatives to complete the work
Work under pressure and meet deadlines
Organisational skills

Team working
Negotiation skills
Ability to learn and adapt
Numeracy
Valuing diversity as well as difference
Personal skills:
Communication skills includes
◦ Verbal communication - What we say and how we say it.
◦ Non verbal communication - What we communicate without words, body language is
an example.
◦ Listening skills - How we interpret both the verbal and non-verbal messages sent by
others.
Team working - Working with others in groups and teams, both formal and informal.
Negotiation, Persuasion and Influencing skills - Working with others to find a mutually
agreeable (Win/Win) outcome.
Conflict resolution and mediation - Working with others to resolve interpersonal conflict
and disagreements in a positive way.
Problem solving and decision making - Working with others to identify, define and solve
problems, which includes making decisions about the best course of action.
P3 & M1 Describe main resources in operation
Physical resources are the resources which are being needed in an organization to operate
and carry out its working. Physical resources of business can be defined as those tangible items
that are essential in order to perform all the basic functions of any businesses. These materials
are so essential that they play a major role in the working of a company. For example-
manufacturing equipments and tools, inventories, production, assembly, storage and distribution
facilities. As far as Blue Inc is concern about, the types of physical resources should be clearly
taken into consideration so that when time comes, it will become easy to select and choose the
best resources as per the company's requirement. The different kinds of physical resources
should be keenly observed by Blue Inc company to meet their set target. It is the main building
block of any business venture as without physical resources they cannot recruit people and
cannot incur cost. Physical resources are the main elements as they constitute a main platform
Negotiation skills
Ability to learn and adapt
Numeracy
Valuing diversity as well as difference
Personal skills:
Communication skills includes
◦ Verbal communication - What we say and how we say it.
◦ Non verbal communication - What we communicate without words, body language is
an example.
◦ Listening skills - How we interpret both the verbal and non-verbal messages sent by
others.
Team working - Working with others in groups and teams, both formal and informal.
Negotiation, Persuasion and Influencing skills - Working with others to find a mutually
agreeable (Win/Win) outcome.
Conflict resolution and mediation - Working with others to resolve interpersonal conflict
and disagreements in a positive way.
Problem solving and decision making - Working with others to identify, define and solve
problems, which includes making decisions about the best course of action.
P3 & M1 Describe main resources in operation
Physical resources are the resources which are being needed in an organization to operate
and carry out its working. Physical resources of business can be defined as those tangible items
that are essential in order to perform all the basic functions of any businesses. These materials
are so essential that they play a major role in the working of a company. For example-
manufacturing equipments and tools, inventories, production, assembly, storage and distribution
facilities. As far as Blue Inc is concern about, the types of physical resources should be clearly
taken into consideration so that when time comes, it will become easy to select and choose the
best resources as per the company's requirement. The different kinds of physical resources
should be keenly observed by Blue Inc company to meet their set target. It is the main building
block of any business venture as without physical resources they cannot recruit people and
cannot incur cost. Physical resources are the main elements as they constitute a main platform
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needed to run a business operation successfully (Laumer, Eckhardt and Weitzel, 2010). The main
sub fields of physical resources in Blue Inc. include:
Building and Machinery
Materials and Wastages
Equipments including Information technology
Insurances of the employees and of the all the goods, machines, factory
Security from rain, threat, etc.
Technological Resources refers to all the new and innovative techniques which are to be
used by the business in order to develop innovative products for the consumers. All technology
system require these seven resources, that is - people, energy, information, tools and machines,
material, capital and time to effectively create and produce a product. The main sub categories of
Technical resources in Blue Inc. are:-
Technology used by the company to develop products and services
Software used by the company
Intellectual Property
Patents and copyrights
Design and label
All these resources are required in the present scenario by all the top companies to
provide their products to the consumer’s. For this less expenses are incurred and large customers
are attracted to buy the products and services.
Blue Inc. one of the big and fastest growing retailers of U.K need to analyse all the
resources effectively and efficiently so as to make business develop and grow at a rapid rate. All
the physical resources when being used by technological resources helps company's growth and
development (Mallah and Bansal, 2010). For instance, Blue Inc owns or lease the several shops
or offices to the different companies throughout UK.
P4 & M2 Describe range of internal and external sources of finance
There are two sources of finance namely, internal and external. Internal sources of
finance are the funds generated within the organisation with the help of present assets. External
sources of finance refers to the arrangement of money from outside sources. The cost of internal
source is low whereas in case of external sources it is comparatively high.
sub fields of physical resources in Blue Inc. include:
Building and Machinery
Materials and Wastages
Equipments including Information technology
Insurances of the employees and of the all the goods, machines, factory
Security from rain, threat, etc.
Technological Resources refers to all the new and innovative techniques which are to be
used by the business in order to develop innovative products for the consumers. All technology
system require these seven resources, that is - people, energy, information, tools and machines,
material, capital and time to effectively create and produce a product. The main sub categories of
Technical resources in Blue Inc. are:-
Technology used by the company to develop products and services
Software used by the company
Intellectual Property
Patents and copyrights
Design and label
All these resources are required in the present scenario by all the top companies to
provide their products to the consumer’s. For this less expenses are incurred and large customers
are attracted to buy the products and services.
Blue Inc. one of the big and fastest growing retailers of U.K need to analyse all the
resources effectively and efficiently so as to make business develop and grow at a rapid rate. All
the physical resources when being used by technological resources helps company's growth and
development (Mallah and Bansal, 2010). For instance, Blue Inc owns or lease the several shops
or offices to the different companies throughout UK.
P4 & M2 Describe range of internal and external sources of finance
There are two sources of finance namely, internal and external. Internal sources of
finance are the funds generated within the organisation with the help of present assets. External
sources of finance refers to the arrangement of money from outside sources. The cost of internal
source is low whereas in case of external sources it is comparatively high.
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Internal source:- basically aims to increase the money produced from the existing
business unit. It includes- sales of stocks, sale of fixed assets, retailed earnings and debt
collection.
External sources:- under this the funds are collected from sources that are outside. This is
further divided into two parts, long term and short term.
In the given company Blue Inc, it is totally upon the top management to choose the kind
of sources of funds that has to be raise in order to achieve the target of the company . Some
factors to be taken into consideration while selecting the best source of finance can be the major
reason behind raising funds, the total amount of fund that is presently required by the firm, the
estimated period of time for which the money is required.
Internal sources of finance which is raised from within Blue Inc. and it is on the
developing the growth of business venture. The main internal sources of finance includes :
Owner's investment refers to the investment which an owner does while starting any
business in the initial days.
Retained profits are the profits of the business which are made by deducting all the
expenses and losses incurred in Blue Inc.
Sale of stock means that stock of Blue Inc. should be provided to their consumers in a
better quality which assist in boosting the sales and generate more profit (Montgomery,
2011).
External Sources of Finance refers to the external factors of Blue Inc. that provide the finance to
any business venture. These include:-
Bank Overdraft means that there is a limit provided by the bank and an individual
account holder can withdraw some more percent amount from his account. The amount is
valued higher than the bank balance.
Creditors are the persons of financial institutions who provide finance to the businesses
by charging a certain rate of interest which is normally higher than bank charges.
Debentures/Bonds refers to all the the long term security of Blue Inc which is being made
against the fixed assets being provided on lease to the banks or financial institutions
(Obschonka, Silbereisen and Schmitt‐Rodermund, 2012).
business unit. It includes- sales of stocks, sale of fixed assets, retailed earnings and debt
collection.
External sources:- under this the funds are collected from sources that are outside. This is
further divided into two parts, long term and short term.
In the given company Blue Inc, it is totally upon the top management to choose the kind
of sources of funds that has to be raise in order to achieve the target of the company . Some
factors to be taken into consideration while selecting the best source of finance can be the major
reason behind raising funds, the total amount of fund that is presently required by the firm, the
estimated period of time for which the money is required.
Internal sources of finance which is raised from within Blue Inc. and it is on the
developing the growth of business venture. The main internal sources of finance includes :
Owner's investment refers to the investment which an owner does while starting any
business in the initial days.
Retained profits are the profits of the business which are made by deducting all the
expenses and losses incurred in Blue Inc.
Sale of stock means that stock of Blue Inc. should be provided to their consumers in a
better quality which assist in boosting the sales and generate more profit (Montgomery,
2011).
External Sources of Finance refers to the external factors of Blue Inc. that provide the finance to
any business venture. These include:-
Bank Overdraft means that there is a limit provided by the bank and an individual
account holder can withdraw some more percent amount from his account. The amount is
valued higher than the bank balance.
Creditors are the persons of financial institutions who provide finance to the businesses
by charging a certain rate of interest which is normally higher than bank charges.
Debentures/Bonds refers to all the the long term security of Blue Inc which is being made
against the fixed assets being provided on lease to the banks or financial institutions
(Obschonka, Silbereisen and Schmitt‐Rodermund, 2012).

Asset Securitization refer to the process of providing the loan against the fixed assets
which are provided on lease but these assets have the higher value than that of loan and in
case the person fails in clearing the loan then assets can be taken for auction purpose.
The Blue Inc. has various sources of finance ranging form big financial institutions and banks
and all the sources have been divided in 3 categories mainly short term finances (for an year),
medium term finances (for 3 years ) and long term finances (upto 5 years). So accordingly Blue
Inc. has to analyse that what type of finance is necessary for the company.
D1
The employees of Blue inc have to manage the resources which helps in doing the
operations in the company. Along with this they have to control the proper budget which assist in
reducing the cost of the product and according to that they can improve the performance as well
as productivity of a business (Thompson and Van der Walt, 2010).
TASK 2
P5 & M3 Interpretation
Trading and Profit & loss account
Particulars Amount Particulars Amount
To Cost of Goods sold
To Gross Profit C/d
38481
49431
By Sales 87912
87912 87912
To carriage outward
To Wages
To rent
To rates and insurance
To advertising
To Bad debts
To depreciation on fixtures
To depreciation on van
To Net profit transferred to
balance sheet
139
28566
4400
3561
1369
879
120
2500
7897
To Gross Profit B/d 20865
which are provided on lease but these assets have the higher value than that of loan and in
case the person fails in clearing the loan then assets can be taken for auction purpose.
The Blue Inc. has various sources of finance ranging form big financial institutions and banks
and all the sources have been divided in 3 categories mainly short term finances (for an year),
medium term finances (for 3 years ) and long term finances (upto 5 years). So accordingly Blue
Inc. has to analyse that what type of finance is necessary for the company.
D1
The employees of Blue inc have to manage the resources which helps in doing the
operations in the company. Along with this they have to control the proper budget which assist in
reducing the cost of the product and according to that they can improve the performance as well
as productivity of a business (Thompson and Van der Walt, 2010).
TASK 2
P5 & M3 Interpretation
Trading and Profit & loss account
Particulars Amount Particulars Amount
To Cost of Goods sold
To Gross Profit C/d
38481
49431
By Sales 87912
87912 87912
To carriage outward
To Wages
To rent
To rates and insurance
To advertising
To Bad debts
To depreciation on fixtures
To depreciation on van
To Net profit transferred to
balance sheet
139
28566
4400
3561
1369
879
120
2500
7897
To Gross Profit B/d 20865
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20865 20865
Balance sheet
Liabilities Amount Assets Amount
Capital
Net profit
Share Premium Account
Profit and loss account
Long term loan
Creditors
Taxation
Dividends
Suspense Account
130000
7897
40000
82000
75000
18000
19500
12500
107103
Land and Buildings
Machinery
Vehicles
Stock
Debtors
Bank
150000
180000
90000
34000
26000
12000
492000 492000
Total Fixed assets: Land & Buildings + machinery + vehicles
= 150000 + 180000 + 90000
= 420000
Current assets: Stock + Debtors + Banks
= 34000 + 26000 + 12000
= 72000
Net assets: Total assets – Total liabilities
= 492000 – 384897
= 107103
Net assets employed: Total assets – Current liabilities
= 492000 – 50000
= 442000
Gross Profit ratio: Gross profit/ net sales* 100
= 49431 / 87912 * 100
= 56.22%
Net profit ratio: Net profit / net sales * 100
Balance sheet
Liabilities Amount Assets Amount
Capital
Net profit
Share Premium Account
Profit and loss account
Long term loan
Creditors
Taxation
Dividends
Suspense Account
130000
7897
40000
82000
75000
18000
19500
12500
107103
Land and Buildings
Machinery
Vehicles
Stock
Debtors
Bank
150000
180000
90000
34000
26000
12000
492000 492000
Total Fixed assets: Land & Buildings + machinery + vehicles
= 150000 + 180000 + 90000
= 420000
Current assets: Stock + Debtors + Banks
= 34000 + 26000 + 12000
= 72000
Net assets: Total assets – Total liabilities
= 492000 – 384897
= 107103
Net assets employed: Total assets – Current liabilities
= 492000 – 50000
= 442000
Gross Profit ratio: Gross profit/ net sales* 100
= 49431 / 87912 * 100
= 56.22%
Net profit ratio: Net profit / net sales * 100
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= 7897 / 87912 *100
= 8.98%
Current ratio: Current assets / Current liabilities
= 72000 / 50000
= 1.44 : 1
Return on capital employed: Net operating profit / employed capital
= 7897 / 442000 * 100
= 1.79%
From the computation of the above ratios it has been analysed that company's gross profit
ratio is 56.22%, net profit ratio is 8.98%. Along with this it has been interpreted that current ratio
of Blue Inc is 1.44 : 1 and return on capital employed is 1.79%. These ratios denotes that
company having good financial performance in the market and according to the values of trading
and profit and loss account company gross profit and net profit is 49431 and 7897.
P6 Calculate contribution and break even point
There are different type of budgets which they can use and on the basis of that they can
put proper control on the spendings which will helps in attaining the goals and objectives. Along
with this it also denotes the financial performance of the Blue Inc in the market (Ward, 2016).
Different budgets which they can use includes cost budget, cash flow, financial budget etc.
If company is launching a new product and the manager of the firm wants to collect the
information that they have to sell the products in a break even. Then according to information:
Particulars Amount
Selling Price
(-) Variable cost
Direct material 2.50
Direct labour 5.50
Variable overheads 1.00
15
9
Contribution 6
Break even point: Fixed cost / Contribution
= 10000 / 6
= 1667
= 8.98%
Current ratio: Current assets / Current liabilities
= 72000 / 50000
= 1.44 : 1
Return on capital employed: Net operating profit / employed capital
= 7897 / 442000 * 100
= 1.79%
From the computation of the above ratios it has been analysed that company's gross profit
ratio is 56.22%, net profit ratio is 8.98%. Along with this it has been interpreted that current ratio
of Blue Inc is 1.44 : 1 and return on capital employed is 1.79%. These ratios denotes that
company having good financial performance in the market and according to the values of trading
and profit and loss account company gross profit and net profit is 49431 and 7897.
P6 Calculate contribution and break even point
There are different type of budgets which they can use and on the basis of that they can
put proper control on the spendings which will helps in attaining the goals and objectives. Along
with this it also denotes the financial performance of the Blue Inc in the market (Ward, 2016).
Different budgets which they can use includes cost budget, cash flow, financial budget etc.
If company is launching a new product and the manager of the firm wants to collect the
information that they have to sell the products in a break even. Then according to information:
Particulars Amount
Selling Price
(-) Variable cost
Direct material 2.50
Direct labour 5.50
Variable overheads 1.00
15
9
Contribution 6
Break even point: Fixed cost / Contribution
= 10000 / 6
= 1667

After the changes in increase in the direct material cost, reduction in selling price, increase in
fixed cost and also decrement in the variable overheads includes:
Particulars Amount
Selling Price
(-) Variable cost
Direct material 3.00
Direct labour 5.50
Variable overheads 0.75
14
9.25
Contribution 4.75
Break even point: Fixed cost / Contribution
= 11000 / 4.75
= 2316
P7 Cash flow forecast
When the employees of Blue Inc forecast the cash flow of the business entity then the
problem which is identified is that the business does not have enough and proper cash and that's
why they are not able to pay its liabilities. When forecasting of cash flows it has been identified
that the company having so much purchases and having remaining stock and also the owner of
the company have to reduce their drawings for their personal use so that they can increase their
cash (Wu, 2010).
The main cause of the problems which is related to the cash flow which includes the low
profits along with the losses, over investment in the capacity. Along with this company having
too much stock and also unexpected changes includes internal or external change. In internal
change loss of key staff and machinery breakdown. In external change it includes the economic
downturn, accidents etc. There are some ways which helps in improving the cash flow and
generate more revenue:
They have to do proper forecasting and in the effective manner.
They have to manage their working capital effectively.
Appropriate source of finance should be opt (Baxter, 2012).
fixed cost and also decrement in the variable overheads includes:
Particulars Amount
Selling Price
(-) Variable cost
Direct material 3.00
Direct labour 5.50
Variable overheads 0.75
14
9.25
Contribution 4.75
Break even point: Fixed cost / Contribution
= 11000 / 4.75
= 2316
P7 Cash flow forecast
When the employees of Blue Inc forecast the cash flow of the business entity then the
problem which is identified is that the business does not have enough and proper cash and that's
why they are not able to pay its liabilities. When forecasting of cash flows it has been identified
that the company having so much purchases and having remaining stock and also the owner of
the company have to reduce their drawings for their personal use so that they can increase their
cash (Wu, 2010).
The main cause of the problems which is related to the cash flow which includes the low
profits along with the losses, over investment in the capacity. Along with this company having
too much stock and also unexpected changes includes internal or external change. In internal
change loss of key staff and machinery breakdown. In external change it includes the economic
downturn, accidents etc. There are some ways which helps in improving the cash flow and
generate more revenue:
They have to do proper forecasting and in the effective manner.
They have to manage their working capital effectively.
Appropriate source of finance should be opt (Baxter, 2012).
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